Karaa is right: it was Reagan (a Republican) who increased the deficit enormously. When Bush I came into office, the deficit was 32% of one year’s Gross Domestic Product (GDP). When Reagan left office, it was 66%. Clinton brought it down to 56%. When Bush II left office, after cutting taxes for the most wealthy and starting two disastrous wars (responsible for a 27% increase), it was at 83%. It is now at 89%. Incidentally, this is not the highest our deficit has been, in relation to GDP. That was in 1945, when it 118% and by ‘49 it was still 93%. (All these statistics come from the Providence Journal editorial: “The National Debt in Historical Context” by Guido H Stempel III, a professor emeritus in the E. W. Scripps School of Journalism at Ohio University).

You ask me to prove that Obama prevented a Depression, and it's almost impossible to prove the causes of something that didn't happen. If an abuser goes to anger management and the beatings stop, did his going stop it? It appears so, but there could be other reasons: fear of prison or of the abuse escalating to murder, the birth of a baby (unlikely, I know), becoming religious, etc. I do believe, though, that if the banks had fallen (as financial experts think would have happened without the bailouts), the US would have fallen too. Of course, when Bush gave the original money, in keeping with his philosophy, he did not prevent the banks from giving outlandish bonuses, which soured all of America on the bail outs. At least when Obama continued round 2, he stipulated that the banks could not misuse the money that way, until they had repaid the loans. Then, when Obama attempted to regulate the banks, it was the conservatives, including some Democrats, who prevented a more meaningful regulation of the stock market and the banks. It was Bush's and Clinton's deregulation that allowed and virtually encouraged the senseless and bankrupting loans and mortgages.

Karaa, money is the major root of the political problem because individuals cannot equal the money that businesses and other countries can donate to influence elections, and none of that comes free. In turn, those business, etc. influence laws and regulations passed. How does it come to pass, for example, that Europe tests for and lists over 45 harmful substances in cosmetics, whereas the US does so for only 15? Money. Why is natural gas protected legally from paying for the effects of pollution, so that the people whose water has now been contaminated by gas have no legal recourse? Why are trucks exempt from emissions controls? I, for one, do NOT want our enemy countries, for example, Iran or North Korea, funding American politicians. It was the Republican-appointed conservative judges on the Supreme Court who were responsible for the ruling that organizations, including foreign governments, could donate any amount of money to political causes and parties. When the Democrats sponsored a bill making it mandatory that any political ad include who paid for it, Republicans voted it down.

When it has been the Republicans who have run this deficit up to the astronomical numbers and they turn around and beat up Obama, it's hypocrisy, as was Steele's (the chair of the National Republican Party) accusation that Afghanistan was "the war of Obama’s choosing." When Republicans scream that we shouldn't pass any new legislation without paying for it (which, I grant you, seems sensible, but isn't, really), and then want to prevent Obama from letting Bush's lowering the tax on the most wealthy run out, according to law, pardon me, they are hypocrites. When Republican leadership does not dispute, but instead, tacitly encourages the Nazi and racist posters used by the Tea Party who vote in Republican primaries, and the belief that Obama is not even a citizen of the US or that he is Muslim, that’s despicable. They have chosen their party's well being over that of their country, and in my book, that's treason.

You ask me to prove that Obama prevented a Depression, and it's almost impossible to prove the causes of something that didn't happen.

So true. We may never really know just how effective some of these aids were until much time has passed. And then, we still may not know. It's the "damned if you do and damned if you don't" approach to problems and issues.

Last edited by Tee on Sat Aug 28, 2010 8:42 pm; edited 1 time in total

When Bush I came into office, the deficit was 32% of one year’s Gross Domestic Product (GDP). When Reagan left office, it was 66%.

Something is wrong here. Bush I FOLLOWED Reagan, so unless the deficit was somehow cut in half on Inauguration Day, you've got the wrong names or the wrong numbers.

A slip of the finger, I suspect. I read this to mean that when Reagan came into office... and when Reagan left office.., considering the debt stood in low 30% of GDP before reaganomics had its way with it.

Lynda X wrote:

Karaa, money is the major root of the political problem because individuals cannot equal the money that businesses and other countries can donate to influence elections, and none of that comes free. In turn, those business, etc. influence laws and regulations passed. How does it come to pass, for example, that Europe tests for and lists over 45 harmful substances in cosmetics, whereas the US does so for only 15? Money. Why is natural gas protected legally from paying for the effects of pollution, so that the people whose water has now been contaminated by gas have no legal recourse? Why are trucks exempt from emissions controls? I, for one, do NOT want our enemy countries, for example, Iran or North Korea, funding American politicians. It was the Republican-appointed conservative judges on the Supreme Court who were responsible for the ruling that organizations, including foreign governments, could donate any amount of money to political causes and parties. When the Democrats sponsored a bill making it mandatory that any political ad include who paid for it, Republicans voted it down.

Thanks for the illuminating examples, Lynda X. I have to say I'm less interested in how did this "political money" problem happen and which party is to blame, and more interested in hearing what can be done and what has been done about it to combat this "legal bribery". For example, are the US legislators expected to recuse themselves when a conflict of interest comes to play? For instance, considerable campaign donations from pharmaceutical industry = no vote on issues directly related to those companies.

JaneO, you are right. I didn't even pick that point up when I misread the article. It says, "Clinton came into office following 12 years of Ronald Reagan and George H W Bush. The debt rose from 32% of our GDP to 66% in those years."

Karaa, party does matter. Like you, I'd just like to vote for the person, and I firmly believes our democracy depends on a strong two-party system, but when the leadership of the Republican Party has an iron-like hold on its members of Congress, making it extremely difficult to vote for something that the Democrats sponsor, it's not individuals who are powerful here. If you think I am being prejudiced or hysterical, just look at the voting record of the Republicans. I am so disappointed in this party, partially because I come from virtually a single-party state, the Democratic, which has led to TERRIBLE corruption. When Clinton was elected, Newt Gingrich, who has recently announced that he will run for President, was asked, as the Speaker of the House, how the Republicans were going to vote on a bill sponsored by the Democrats. He said that it didn't matter what the bill was, that Republicans were going to vote against it to get back into power. The present day leadership has continued this policy. Republicans have an ethical and political obligation to vote against bills with which they disagree, but when they have become "the Party of No," I believe they betray our country.

Your argument of whether or not Obama prevented another Great Depression is marred by a fatal flaw.

Namely, he was NOT president when the crisis hit. How can you argue around that? It was Bush and Hank Paulson's plan that saved the world from financial collapse.

Every economist from the most conservative Miltonian monetarist to the most liberal Keynsian agree that the Bush/Paulson bailout was what prevented collapse.

Only the doctrinal libertarians advocate that letting them fail would've been better.

Certainly, you can't go back and say let's try it the other way, but when you get that much approval from such a broad bunch of divergent view points, there is a tangible amount of certainty.

If your assertion is that Bush's courage in putting faith in Paulson and getting TARP passed saved the economy and that Obama, continuing Paulson's framework (and using Paulson's right hand man, Geithner, to accomplish it, since he was so unwilling to taint himself by employing someone in Bush's cabinet), saved the economy from a Great Depression, then that is fact based and less politically myopic.

As for the bank bonuses, though I've read the history, I can't remember if this was even raised ex ante.

Despite that the bonuses seem egregiously high to the majority of the population (yes, me included), in proportion to the absolutely dire situation we were in, it was absolutely nothing. The bonuses were a drop of water; the imminent collapse was a tsunami.

It is not hyperbole to say we were a hair's breadth away from collapse. To diddle around negotiating RELATIVE unessentials would have been to not see the forest for the trees, with tragic consequences.

For the record, I don't support high bonuses to bank employees at banks where they received and hadn't yet paid back TARP funds.

Accordingly, I also didn't support the Obama administration's use of the Chrysler bankruptcy to launder government bailout money directly into the pockets of the UAW.

This is far worse because it is the government who is directly putting money into the UAW's pocket. Conversely, with the banks, it was not the government that directly put the money into the hands of the bank officers. Instead, the government gave money to the banks to repurchase toxis assets and later the banks, acting on their own, paid out high bonuses while still using public money to repair their balance sheets.

The Chrysler bankruptcy manipulation is described here by one of the top academics on UCC and bankruptcy law in the country, J.J. White at the University of Michigan Law School:

The interesting issue in Chrysler is not the
lawyers’ manipulation of the law; it is the
politicians’ use of the bankruptcy to
launder money. Had the President simply announced that the
federal government would give $4 billion to the UAW, the public,
even the public in the UAW’s home state of Michigan, would have
been up in arms. By laundering the money through the Chapter 11
process, the administration disguised the payment and avoided
the outrage.

Where is the evidence to support my hypothesis? Some comes
from the deviance of the process; most can be inferred from
Steven Rattner’s description of the political negotiation in the
administration and of the acts and thinking of the White House
automobile task force that Mr. Rattner directed.

[goes on to provide more evidence]

The surprising capitulation of the
secured creditors is also suspicious.
There is a strong argument that a
Section 363 sale cannot be made over
the objection of a secured creditor,
unless the creditor is paid not merely
the value of the collateral that secures
its debt (here no more than a few
billions and quite possibly less than
that) but the face amount of its debt
(here $6.9 billion). Because the secured
creditors agreed to the government’s
offer of $2 billion—or, more accurately,
because JPMorgan Chase & Co., the
agent for the secured creditors, was
found to have bound all of the secured
creditors by its agreement—no court
ever had to consider the argument that
Section 363 required payment of the
face amount of the secured debt. Mr.
Rattner proudly claims to have moved
Jimmy Lee, the Morgan banker who
spoke for the secured creditors, from a
claim for “not one penny less than $6.9
billion” to a $2 billion settlement by
adroit negotiation.

There is another possibility. Mr. Lee’s
employer and several of the other
secured creditors were TARP (Troubled
Asset Relief Program) recipients. It is plausible that Mr. Lee
accepted the $2 billion and chose not to argue for more in court
because word was passed to his boss, Jamie Dimon, that the
administration wanted it that way.

END QUOTE

You also presented a skewed understanding of Citizens United, the Supreme Court case. I've read all 183 pages. I don't think you have, or you would know the Supreme Court only ruled on the ability of corporations to run political advertisements, not political contributions.

To quote from the case:

Premised on mistrust of governmentalpower, the First Amendment stands against attempts to disfavor certain subjects or viewpoints or to distinguish among different speakers, which may be a means to control content. The Government may also commit a constitutional wrong when by law it identifies certain preferred speakers.

There is no basis for the proposition that, in the political speech context, the Government may impose restrictions on certain disfavored speakers. Both history and logic lead to this conclusion.

And here's the First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

I guess if you think the First Amendment is flawed and you know more than James Madison, then there's nothing that can convince you.

I urge you to remember the words of Oliver Wendell Holmes:

"If there is any principle of the Constitution that more imperatively calls for attachment than any other it is the principle of free thought, not free thought for those who agree with us but freedom for the thought that we hate. "

I agree that this country came within a hair's breath of a financial meltdown, and the repercussions of that are painful even to think about. As it was, we started a tsunami around the world of collapsing stock markets and economies. If it had been worse, I believe it eventually would have resulted in another world war, an event that history shows happens when empires fall.

You say that Obama “ was . . . unwilling to taint himself by employing someone in Bush's cabinet,” but you must have forgotten Robert Gates, Secretary of Defense. If I remember correctly, Lincoln was the last president to appoint cabinet members from the losing party. Did Bush appoint any of Clinton’s cabinet members?

You are absolutely right: Wall Street bonuses are a drop in the bucket, but I suspect you would agree that they exemplified the continued arrogance, greed, and “me first” attitude that caused this meltdown in the first place.

Accusing Obama’s policies to “money laundering, “ even by U of M’s Law School, is just another example of the despicable use of loaded words. Comparing Obama and the auto union to gangsters may make vivid reading, but it’s part of the demeaning, degrading--but tacitly acceptable-- practice to increase people’s suspicion of not only the President, but more importantly, of the US government. It’s offensive and unworthy of any law school or party or individual. Obama has endured these--and worse--insults from the opposition, NEVER reciprocating, in hopes of bipartisanship, even to the point of alienating his own party.

You are splitting hairs when you say that the Supreme Court did not allow limitless financial donations to political parties, but only allows them to “run political ads.” When the Republicans, who traditionally garner more donations--by far--from business than the Democrats, vote against a bill to identify the organization who paid for an ad, they do so out of strict self-interest, not as guardians of our country. Are you seriously arguing that such a ruling will be good for our country?

As you know, TMS, many legal scholars, including four on the Supreme Court, do not believe that our Constitution was talking about businesses’ right to free speech, but only people’s. Republicans scream about “activists judges,” but when their appointees interpret the Constitution in a way that hasn’t since its adoption, they are surprisingly silent.

Karaa, party does matter. Like you, I'd just like to vote for the person, and I firmly believes our democracy depends on a strong two-party system, but when the leadership of the Republican Party has an iron-like hold on its members of Congress, making it extremely difficult to vote for something that the Democrats sponsor, it's not individuals who are powerful here. If you think I am being prejudiced or hysterical, just look at the voting record of the Republicans. I am so disappointed in this party, partially because I come from virtually a single-party state, the Democratic, which has led to TERRIBLE corruption. When Clinton was elected, Newt Gingrich, who has recently announced that he will run for President, was asked, as the Speaker of the House, how the Republicans were going to vote on a bill sponsored by the Democrats. He said that it didn't matter what the bill was, that Republicans were going to vote against it to get back into power. The present day leadership has continued this policy. Republicans have an ethical and political obligation to vote against bills with which they disagree, but when they have become "the Party of No," I believe they betray our country.

What I was trying to say is that both the US Republican Party and the US Democratic Party fail my political litmus test. The political pendulum sways from the Republicans to the Democrats to the Republicans and back, and that, the de facto two-party system, IMO, is part of the problem. Each party can screw up massively and still be secure in the knowledge that give the other guys their turn and the pendulum will inevitably swing back to them. The US electorate, it seems to me, are forever doomed to vote in protest against the party in power: Party D gets its turn, gets nothing done & disappoints because Party R does not cooperate, and Party R gets voted in, gets nothing done because Party D refuses to cooperate, and Party D in turn gets voted in again. Rinse and repeat. A lot of "political capital" gets wasted on smear & stall campaigns. So instead of a list of what the other party is to be blamed for, I'd rather hear what each party has on the table to combat this "political money/legal bribery" problem.

The US system does correct itself over time, I'll give it that, only way too slowly to my taste. I prefer a multi-party systems with coalition governments/cabinets and with instant accountability, i.e. if the government fails to secure a vote of confidence, the government is out, not come next election but come next day. That'll keep them on their toes!

OMG, U R A RACIST!!!!!!1!1! (Just kidding. I'm not actually that sensitive). Besides, that probably isn't even a Chinese saying, much less curse. There's not really an equivalent in Classical Chinese or the vernacular.

Back on topic though, I certainly don't envy Obama his job, but I have mixed responses on both Obama and Bush and don't hate either. To me, they're from the same mold, even if they are at opposite ends of the political spectrum: 2 reasonably intelligent men (although Obama seems to be the more articulate) with reasonable forces of personality, who lack experience, are over their heads and make the mistake of listening to the wrong people and pushing through unpopular measures over the protests of the public. But sometimes approval ratings have little to do with historical legacies. Look at Lincoln and Lyndon Johnson, both presidents who had ratings in the toilet when their respective terms ended.

Whether or not Obama rebounds from this depends in a large part on the economy, which may or may not be beyond his control. While I understand the macro-economic implications of all his spending, sooner or later bills come due, and unlike Roosevelt, his policies aren't doing anything other than creating temporary jobs and they're not creating or producing anything either, just propping up the existing system. Supposedly China has already bounced back from the recession by funding numerous public projects and concentrating on promoting their local companies. Of course, news out of China is also controlled on a very tight leash.